Document

Impact of GST on Special Economic Zone – Part II

Updated on: Jun 22nd, 2021

|

1 min read

In our previous article, we discussed various schemes rolled out for the promotion of business in Special Economic Zones. To continue our discussion further, we are now analyzing the implications, that GST has brought along on units operating in SEZs. As of today, thousands of units are operating from these SEZs across India.

Latest Update

Union budget 2021 Outcome:
Few of the items on which Customs Duty Rates are revised are as follows: -a) Reduced duty on copper scrap from 5% to 2.5%
b) Basic and Special additional excise duty on petrol and high-speed diesel oil (both branded and unbranded) is reduced
c) Increased duty on solar inverters from 5% to 20% – Raised duty on solar lanterns from 5% to 15%
d) The basic customs duty on gold and silver reduced
e) The department will rationalise duty on textile, chemicals and other products
f) The revised rates will be applicable from 2nd February 2021 onwards.

These units are now set to face fresh challenges with the introduction of GST. While these units are enjoying exemption from Services Tax, Central Sales Tax and in some cases Value Added Tax (VAT), this may not be the case under GST regime. Currently, all Goods and Services provided from a unit operating from SEZ to a business in Domestic Tariff Area (DTA) is considered as an import. Accordingly, Basic Customs Duty (BCD) and Countervailing Duty (CVD) are levied on such sale from a SEZ to DTA.  

GST is already set to subsume CVD and SAD, thus going forward BCD and Integrated Goods and Services Tax (IGST) will be charged on such supplies made from SEZ. Also, the buyer will have the credit of IGST available to set off against the liability of CGST and SGST subject to prescribed conditions.

Some of the benefits and exemptions that SEZ operators are eying from GST are:

  • Supplies into SEZ to be exempt from GST and be treated as export outside India
  • Easy Refund Procedure of input GST paid on procurement of Goods and Services if any.
  • Minimalistic Compliance Requirement and Return Filing Procedure
inline CTA
India’s Fastest and Most Advanced 2B Matching
Maximise ITC claims, use smart validations to correct your data and complete 2B matching in <1 minute
logomastercard-logo

Pay taxes with your Mastercard credit card & enjoy benefits such as

  • Instant payment confirmation
  • Interest free credit period
  • Easy EMI conversions
  • Earn reward points
Use code: CTMASTER For Additional 10% Off!

Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

Cleartax is a product by Defmacro Software Pvt. Ltd.

Company PolicyTerms of use

ISO

ISO 27001

Data Center

SSL

SSL Certified Site

128-bit encryption